After a week of being too close to call, California’s Proposition 14 has passed, allowing the state to issue $5.5 billion in bonds for stem cell research.
The measure flew under the radar early in the election season, with almost no opposition and $15 million spent by proponents. But Californians were split on the measure, with just 51% of residents voting yes as of Nov. 12 when the race was called.
Proposition 14 was brought forward by real estate developer Robert Klein, who formerly served as board chairman of the California Institute for Regenerative Medicine (CIRM). The agency was created by another ballot proposition in 2004, and remains one of the only state-funded stem cell research agencies in the United States.
John Matsusaka, a University of Southern California economist with a focus on the ballot process, says this measure put a tough decision on voters.
“There’s many useful things you might want to do research on, is this the one you want to put so much money into,” he asked. “This was an interest group who said they wanted to carve out one thing for themselves … which raises some questions.”
CIRM was envisioned as a mecca of biological discovery that would make California a leader in curing diseases such as Alzheimer’s, cancer and diabetes. Proponents say a new injection of state funding will help them continue this important work.
But the agency has faced criticism over the years from those who feel the promised research hasn’t materialized, and that conflicts of interest have compromised the institute’s integrity.
David Jensen, author of a book about the Institute called “California’s Great Stem Cell Experiment,” says even with the passage of Proposition 14, doubts about the agency’s future remain.
“[In 2004], people were led to believe that stem cell therapies and cures were right around the corner. That did not turn out to be the case,” he said. “It's very important to finance stem cell research. The question is, should the state do that?”
Controversial Beginnings
California voters were first asked to weigh in on stem cell funding in 2004. At the time, George W. Bush was in the White House and had banned federally funded embryonic stem cell research.
That meant California scientists investigating HIV/AIDS treatments, Parkinson's cures and more were fighting over a trickling well of funding. So they took to the ballot with Proposition 71, which passed with 59% of the votes. That allowed the state to issue $3 billion in bonds for the creation of the California Institute for Regenerative Medicine.
“Because of the timing, it was a shot in the arm to the field,” said Zach Hall, who served as the first president of CIRM.
Proposition 14 opponents argue that because former President Barack Obama lifted restrictions on embryonic stem cell research, California scientists can now lean on federal grants and private industry funding to carry their work through.
“The NIH could support most of the work that CIRM has funded in the past 10 years, and so the rationale for having a new proposition and increasing the amount of money is unclear,” Hall said. “You could say just as well why don’t we have a state agency to fund CRISPR research?”
But supporters argue that federal grants are competitive, and there isn’t enough money in the national cache or in private industry to backfill what CIRM provides for researchers across the state.
Robert Klein, former chairman of the Institute’s board and leader of the campaign supporting Proposition 14, said that without new bond funding, the Institute’s existing research projects would be out of money once they reach the ends of their current grant cycles.
“Those trials will not have any funding available to take them forward,” he said. “And we have a pent-up demand waiting for these new funds from Prop 14 for dozens of new trials for new therapies.”
Last summer CIRM told researchers it would stop accepting new grant applications, with the exception of $5 million in emergency funding it set aside for COVID-19 research.
Where Did The First $3 Billion Go?
Supporters of Proposition 14 say the work that CIRM has done over the years has brought California to the forefront in stem cell research, and laid the groundwork for cures to hundreds of diseases.
The agency has distributed hundreds of research grants to public and private universities, medical research institutions and for-profit companies.
Nearly 40%of that money has gone into basic research that helps scientists understand stem cells and how they might be used in medicine, according to a San Francisco Chronicle analysis of CIRM spending. The list of conditions researchers have focused on is long, and includes heart disease, Huntington’s, leukemia, Alzheimer’s and glioblastoma, to name just a few.
CIRM put 16% of the money into building infrastructure, including about a dozen stem cell research centers, according to the analysis. Another $388 million went toward taking research out of the lab and applying it to humans.
Of the 90 clinical trials the Institute has funded, two drugs have earned FDA approval for fatal forms of blood cancer, according to the campaign supporting the proposition.
The campaign reports CIRM-funded researchers have published 2,900 medical discoveries.
“From Sacramento to San Francisco to LA to San Diego, these world eminent scientist leaders in this field came together and said we have to have this funding to go forward,” Klein said. “We can’t attract and hold the best scientists in the world unless we can show them that the therapies they work on are going to actually be able to get to patients.”
Supporters also argue that Proposition 71 was an economic boon for the Golden State. A 2019 study from the University of Southern California (commissioned by CIRM) estimates that the Institute’s impact on California’s economy is $10.7 billion in gross output, $641.3 million in tax revenue and nearly 56,000 jobs created.
But Matsusaka, a USC economics professor who was not affiliated with that study, says he’s doubtful that the $5.5 billion that Proposition 14 will inject into stem cell research will be the job-generator California needs now.
“This is money that’s channeling into research, into scientists, into highly skilled white collar workers who are very fully employed already,” he said. “If you were pouring money into restaurant workers or something like that I think there could be a stimulating effect because that’s where there’s a big pool of people who are unemployed right now. It’s hard for me to see how pouring money into this could have a stimulating effect.”
And he says pulling money out of other sectors to support this work could do harm to the state’s economy more broadly.
Conflicts of Interest
At several points during its 16-year history, CIRM has been criticized for conflicts of interest between its board and the researchers it supports.
An analysis from the California Stem Cell Report, which has been tracking the agency since its inception, found that Stanford University, UCLA and UC San Diego are the top recipients of CIRM funding, and they all have representatives on the CIRM board.
“Far too many board members represent organizations that receive CIRM funding or benefit from that funding,” wrote the National Academy of Medicine in a 2012 study of the agency. “These competing personal and professional interests compromise the perceived independence of the ICOC (the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”
In 2014, a former CIRM president left his job and almost immediately took a high-paying position at an agency that receives research funding from the Institute. David Jensen with California Stem Cell Report has tracked several other conflict of interest issues within the organization.
He says Proposition 14 changes some legal definitions and increases the number of people on the board from 29 to 35, but does not do anything to ameliorate those problems.
“If you’ve got the dean of the medical school at UC Davis sitting on that board, voting on programs that might benefit his or her institution, legally or not that’s still a conflict of interest,” he said.
The agency has historically argued that the relationships between its board members and the scientists it supports are in line with its established conflict of interest policies.
After Proposition 14 was declared successful, the campaign supporting it called the measure “one of the most important investments our state can make.”
“Over the past decade, California has made incredibly thoughtful and impactful investments in developing stem cell therapies and cures for diseases and conditions like diabetes, cancer, blindness, Parkinson’s, paralysis and many more,” wrote Robert and Danielle Klein, with the Californians for Stem Cell Research, Treatments and Cures campaign, in a statement. “Now we know this progress and work to mitigate human suffering, restore health and improve the human condition will continue.”
The measure will ultimately result in California taking on $7.8 billion dollars in debt, including interest.
